FAQ

What is FACE of Rhode Island?

FACE of Rhode Island is a State of Rhode Island SGO or Scholarship Granting Organization that allows corporations to take tax contributions that will directly benefit the children of Rhode Island families who otherwise would not be able to afford a Catholic education.

What is a Scholarship Granting Organization?

An SGO is a state approved not-for-profit that collects and distributes corporate tax credit contributions from businesses. The contributions are then used to help economically challenged families choose a Catholic school education for their child.

SNAPSHOT:

Businesses must be registereed as LLC, LLP, S-Corp, or C-Corp

Aggregate State Tax Credit is capped at $1.5million dollars

There is no minimum on the size of the corporate contribution. However, the business donor cannot apply for more than $100,000 in tax credit per year.

Actual after tax cost could vary based on individual income tax status.

Corporations may apply for either a one year (75%) or two year (90%) tax credit

What are the Benefits?

Not only does the corporation receives a wonderful 75% or 90% State tax credit, depending on their tax status, the corporation might also apply for a subsequent federal deduction. (Please check with your tax accountant.) In addition, your State of Rhode Island tax credit corporate contribution will be put to very good use. It will enable economically challenged families to choose a Catholic education for their child.

STATISTICS:

Students enrolled in Catholic schools save the taxpayers of Rhode Island just under $200 million in educational dollars each year. Catholic schools have a 97% graduation rate with a 95% college matriculation rate.

When did the Rhode Island Corporate Tax Credit Program begin?

The Rhode Island Corporate Tax Credit Program was signed into law in 2006, by Governor Donald Carcieri. The program allows corporations to defer corporate state income tax in exchange for assisting families with financial support to allow them to enroll their child(ren) in a non-public, or faith-based school.

How does this program work?

The program allows eligible corporations to apply for a lucrative tax credit in exchange for making a comparable contribution to an SGO. The program is open to certain types of business organizations with projected State of Rhode Island corporate tax liability. LLC’s, LLP’s, C-Corps and S-Corps may each apply.

When can a business apply?

Eligible organizations can apply for a scholarship tax credit on July 1 of every year for the upcoming fiscal year. Some businesses will choose to apply for a more lucrative two-year tax credit.

How does a business apply?

Applications will be published and available online by the Division of Taxation in the month of June. An application can be made for either a one or two year commitment. The one-year commitment is rewarded with a 75% corporate tax credit. The two-year commitment is rewarded with a very generous 90% corporate tax credit for each of two fiscal years.

How will a business know if it is selected?

If selected, the corporation will receive an authorization letter directly from the Division of Taxation of the State of Rhode Island notifying the award and the amount. Also the corporation would be directed to send an equivalent payment amount to the scholarship granting organization of its choice within 120 days of notice. Won’t you choose FACE of RI?

Let’s look at an example:

A corporation that projects $10,000 in State business tax liability, is eligible to apply for a two-year tax credit of $9,000 each year. Then, by writing a check for $10,000 to FACE of RI each year, their tax credit contribution will be used to educate two students in a Catholic elementary school, or assist a deserving family to send their child to the Catholic high school of their choice.

Did you know?

FACE of RI has granted just under $3 million in corporate tax credit contributions and assisted over 2,100 students since its inception in 2006.

What determines if a student is eligible for this program?

Students must demonstrate family incomes at or below 250 percent of the poverty level in accordance with federal guidelines and must reside in Rhode Island.